Westpac on the medium term outlook for RBA interest rates
This on the Reserve Bank of Australia from Westpac's piece on today's consumer sentiment data: Australia data - Westpac Consumer Sentiment (September): 97.9 (prior 95.5)
WPAC chief economist Bill Evans and what to expect from the RBA:
- The Reserve Bank Board next meets on October 3. There is no doubt that the Board will continue to leave the cash rate on hold.
Of more interest is the medium term outlook for interest rates.
- While those commentators favouring rate hikes next year point to record business conditions we are starting to see a considerable gap open up between business conditions and business confidence.
- Persistent weak consumer sentiment, consistent with weak consumer demand, may be worrying businesses around the sustainability of current strong conditions.
- From our perspective prospects for consumer spending and residential construction appear soft.
- We do not expect that economic conditions in Australia in 2018 will be consistent with the need for the Bank to raise rates
(bolding is mine - WPAC again reiterating the view the Bank is on hold for an extended period)